Nigel’s Notes - Opinion is inevitably divided across the political spectrum

Nigel Don MSP

Published:08:00Tuesday 16 December 2014

The Commission set up by the UK government immediately after the referendum and chaired by Lord Smith of Kelvin reported on November 27.

I’d like to give you an outline of what it covered and what these proposals might mean for Scotland. We should note at the beginning that these proposals need to be accepted by the UK government and then acted upon. Not everything requires legislation but much of it does.

Paragraph seven sets out the principles of the agreement and includes among other things that the package of powers, when taken together, should form a substantial and cohesive package of powers, enabling the delivery of outcomes that are meaningful to the people of Scotland; that they should strengthen the Scottish devolution settlement and the Scottish Parliament within the UK; and that neither the UK Government nor the Scottish Government should gain or lose financially simply as a consequence of devolving a specific power. It’s all intended to be fair and practicable.

The Commission took a vast amount of evidence. Lord Smith and the Commission secretariat attended 25 events across Scotland attended by over 215 organisations and groups to listen to their views. They also received 407 submissions from civic institutions, organisations and groups, and 18,381 from members of the public.

The first part deals with the constitutional settlement and provides for the Scottish parliament to have control over its own elections including the possibility of votes for 16 - 18-year-olds, issues to do with inter-governmental working, the crown estate, regulation of post and telecommunications, and representation in Europe.

The next section relates to the economy, jobs and social justice. It provides for the Scottish government to have some increased control over welfare payments and many areas of business regulation including transport, and oil and gas licensing.

The third part is to do with financial responsibility. Flexibility is proposed for the Scottish Government to set bands and rates for income tax on earned income, but not on income from savings or dividends. Air Passenger Duty is the only other tax to be devolved. It is argued that this is the largest transfer of power ever, and that might be the case in terms of gross tax numbers. The difficulty lies in the bits which are not to be devolved and the effectiveness of the powers which are to be transferred.

Immediate reaction from the politically neutral was less than enthusiastic, for example Grahame Smith of the STUC: “While there are certainly positive elements in these proposals, we are underwhelmed by the package as a whole, which does not meet our aspirations.”

The Institute of Economic Affairs described the proposals as “a dangerous half-way-house, failing to bring the benefits that much fuller devolution would have brought to Scotland.”

Political power is for a purpose. The central planks of the SNP’s approach to its representations to the Commission were that we should have powers to make our society more equal, and powers to manage the economy to generate sustainable economic growth.

The issue of welfare payments is only part of the story when we are trying to help those most disadvantaged members of our society. It is of course far better for folk to be in work, but that must be work which pays. The legal minimum wage is significantly below the living wage, and those who are paid the minimum wage are condemned to in-work poverty. This may not concern anyone in the rest of the UK but I won’t be content until we have seen the end of food banks in my constituency.

Also missing from the proposals, are any actually designed to help economic development. Even the devolution of air passenger duty, which has been proposed for many years, will be useless if the rest of the UK takes the opportunity to abolish it! And we were told in the budget that Northern Ireland is to be allowed to change its corporation tax but not Scotland. All in all, there are powers to be welcomed and they will be used. Opinion is inevitably divided across the political spectrum .’’

as to the range and significance of the proposed changes, but too much remains reserved in the areas of both tax and welfare payments to pretend that these matters have now been genuinely devolved.